LIC IPO : Chairman said returns to policy holders may increase even more as LIC will outperform post IPO
Listing of Life Insurance Corporation of India (LIC) on stock exchanges will bring out version 3.0 of the insurance firm, its chairman MR Kumar said “When we nationalized life insurance in 1956, my view was, that was LIC 1.0. When the market opened up and we were under competition and we did well in a competitive market too, that was LIC 2.0,” Mr Kumar said while answering a question at a virtual press conference ahead of the insurer’s initial public offering (IPO) said “ And now, we are going to see LIC 3.0, a listed organization and a listed, huge, life insurance company. 3.0 would mean we would have another family of shareholders.
We need to meet their needs,” he said. Mr Kumar said LIC needs to be ‘agile, agile in these circumstances’. “We are working on several things at once to make this happen,” he said. He added: “We look forward to delivering outstanding results to our policyholders, who have been with us through this time and our shareholders.”
The government will reduce its stake in LIC to 5% from 100% at present. Asked how the interests of minority shareholders would be protected as the government would hold 95% stake in the company after the IPO, Mr. Kumar said, “LIC has equity in so many companies.
We have nominee directors in many of these companies. So we know about minority shareholders. “So, when it comes to our own shareholders, don’t you think we’ll be far ahead of what others are doing?” he said. Stating that LIC was watching global events amid geopolitical tensions, he said the IPO would hit the market in March as planned and preparations were on for the same.
He added that LIC will be a board-led organization and the returns to policyholders should not decrease, but in return, it may increase as LIC will perform better after the IPO. He said that in the interest of LIC’s Bank Assurance business, the stake in IDBI Bank will continue. At present, LIC holds 49.24% stake in IDBI Bank Holdings are expected to decrease in the near future. But LIC will not exit its investment in the bank completely, Mr. Kumar asserted.